Price hikes show need for action
Rapidly-escalating house prices are having severe consequences for prospective first-home buyers and the many others who can’t even see a prospect of home ownership now.
Gisborne’s rental housing market is under similar price pressure from a lack of stock, with a progressively higher proportion of take-home pay required to put a roof over the family’s heads; if you can find one.
This worsening situation is also now a handbrake on regional economic development, and operational continuity, with finding accommodation a big challenge for people looking to relocate here to take up a job offer that isn’t for a senior/well-paid position.
A growing disconnect between house prices and incomes is a problem nationwide; an NZ Herald-Kanter poll of 1000 New Zealanders published yesterday found that 52 percent said house prices needed to fall, 35 percent said they needed to stay about the same, and only 6 percent said prices needed to rise.
The crisis here is on full display with median house prices hitting an all-time high of $560,000 last month, up $176,000 or 45.8 percent on the same month a year ago (it was up 16.5 percent on the previous record high, $480,750 from July 2020). Not surprisingly, this was the biggest median price increase in the country, significantly closing what used to be a large gap with national median house prices — which also hit a new high of $685,000.
The Gisborne region’s median income taken from the 2018 Census was $25,900, with 10.9 percent of adults earning over $70,000; that compared to a national median income of $31,800 and 17.2 percent of adults earning over $70,000.
Indicative of the challenges this surge in prices is creating in our property market, Tairawhiti was the only region in the country that didn’t see an increase in sales volumes compared to September 2019 (39 properties sold both months).
One benefit of the surging prices, though, was an increase to 64 new properties listed in September — up from 54 the previous September.
Real Institute of NZ regional director Neville Falconer told The Herald yesterday this was “hopefully the first sign of improved stock levels after a couple of years of low listings and inventory”.
Significant house building is needed in Gisborne city as soon as possible. The Tairawhiti Resource Management Plan is out of date and hindering residential development; good intentions to resolve this don’t seem to have developed into anything tangible yet. Central government is also set to reform the Resource Management Act, with all parties in contention acknowledging this legislation is a big impediment to housing development. Then there is the question of how our building industry can ramp up capacity.